California lawmakers have changed the way the state's Board of Equalization measures and taxes natural gas vehicle fuel.

At the start of 2015, the state will begin taxing compressed natural gas (CNG) and liquified natural gas (LNG) based on a per-pound rather than per-foot rate. The move is revenue neutral for the state. The state has been using its existing system since 1971.

The changes have been made to the existing Use Fuel Tax Laws, and state that CNG must be sold in a gasoline gallon equivalent that is equal to 8.87 cents per gasoline gallon or 5.66 pounds. The current use fuel tax for CNG is 6 cents per 100 cubic feet.

LNG must be sold in a diesel gallon equivalent equal to $0.1017/DGE or 6.06 pounds. While LNG's current use fuel tax is 7 cents per gallon.

Natural gas vehicle operators and fleets that have paid the annual flat-rate tax are not subject to the use fuel tax, so long as the NGVs have a current flat-rate decal affixed to them.

Vendors must also place labels on CNG dispensers letting the public know it is based on a “gasoline gallon equivalent,” while LNG vendors must have a “diesel gallon equivalent” label on its dispensers.